Strengthening Regional Development
This is the closing post of this series. In all previous ones I have considered the World as a single entity, and I pointed out that cooperation is needed, both at the level of a single multinational company (Corporate Governance), at the level of supply and delivery chains that involve a multitude of players often operating in different Countries and subject to different regulations (sometime the issue is that they operate in the cyberspace outside of any specific Country regulation!), and at the level of interGovernmental agreements.
At the same time, the World is a patchwork of different cultures and markets, each bringing specific needs, requirements and constraints. Hence the recipe “one fits them all” simply does not work and we have to consider specificity and use them to strengthen the regional development. The basic components in planning the new world are the same everywhere, what changes is the way to apply them. This is what I am considering, at a general level, in this last post.
- Sustainable Development
Some 50 years ago I was in China lecturing at Beijing Polytechnic and in the free time I was taken around to see the countryside. There were factories manufacturing tractors but in the fields I saw farmers using oxen for plowing. So I remember asking: Why aren’t they using tractors for plowing? The answer was: because with a tractor you can do the work of hundred men and at that point what would you do with them? You can twist this sentence in many ways but the core remains the same: If a Country has a certain kind of resources adopting a technology that decrease the value of those resources creates a problem. We are seeing this in the shift to automation, robotics, in the digital transformation getting rid of several processes by shifting activities to the cyberspace….
A sustainable development has to take these aspects into account and they are country/region specific.
- Financial and Monetary Systems
Finance has become one of the (important) fuel of economy, sustaining investment and quickly relocating financial resources where they are needed, Actually the problem is in the meaning of “needed”. Resources would be needed for pursuing a sustainable future, different regions may have different views on sustainability (like investing in education -a long term horizon-). Dramatically decrease mining of certain ores would contribute to environment sustainability but might plunge a Country into debt, decreasing its export value. Providing financial support for cleaner mining would meet local environmental needs but that shall be coordinated with market acceptance of increased raw material cost… The monetary lever has become very important in sustaining economic recovery, we are seeing what the Federal Reserve and the BCE are doing to sustain post Covid-19 recovery. Smaller Countries need similar kind of monetary policy, although this is much more difficult to achieve.
- Banking and Capital Markets
This connects to the previous point. The rise of the New Digital Banks, based in the cyberspace, is changing the landscape and the whole banking system will look quite different at the end of this decade. However, Capital Markets and Investment Banks are already today hidden to the everyday experience of the lay people. These play a significant role in directing markets by sustaining production in specific areas. By far these institutions have a global footprint (the cyberspace has no Country/regional boundary) but there are a number of Digital Banks and Capital Funds addressing the need of specific regions.
- Cities and Urbanisation
Urbanisation is a general trends, as well as the creation of mega-cities. We have the technology to manage these growing aggregations although in most cases the growth is not the result of planning by something that is just happening. Cities are attraction points particularly in poor areas stricken by famine and war. In developed countries there is a tendency to move to the surrounding areas, fleeing from the city, to enjoy a better environment. There is a strong need to shift from managing (make-do with) what is happening to long term planning. This is crucial in pursuing sustainability at environmental level as well as the wellbeing of citizens.
- Public Finance and Social Protection
The private investment capital goes to where revenues are most remunerative. As an example, we have seen that the ROI on telecom infrastructures in many European Countries has decreased below the level of capital remuneration (cost of money): this means that Operators have problems in harvesting capital to develop infrastructures (like the one for the 5G or deployment of optical fibre in low density areas). In these areas Public Private Partnership can ensure the viability of investment.
- Future of Health and Healthcare
Healthcare varies significantly from Country to Country (and sometimes even within a Country). Technology is increasingly support remote consultancy and diagnoses and this is particularly useful in developing Countries (although it is becoming widely adopted in advanced economies as well). A shift to Digital Healthcare by decreasing cost and supporting graceful scaling is the future of healthcare. This requires access to communications infrastructure (in most cases via wireless link), the availability of a smartphone and of sensors to provide clinical data.
- Covid 19
The pandemic has been tackled at Country and Regional level. The impact, particularly in terms of fatality and disabilities, was different depending on the healthcare quality and resource availability. It has also been clear that those Countries, like South Korea, Japan and Taiwan that learnt from the SARS epidemic have been in a much better position to fight the new one. Regional Development is therefore important to tackle the possible (probable) new crises.
Different Countries have different bio-systems and their preservation is location dependent.
- International Trade and Investment
Every Country would like to have access to the whole world market to export its products but at the same time would like to protect its local market providing privileged access to its industry… International trade agreements are in place to balance these conflicting needs. Attracting international investment is also a priority for most Countries and this in turns can create international friction as he establishment of favourable condition in one Country goes to detriment of other Countries. Recent issues with the Netherlands (having favourable conditions for headquartering global companies) and Ireland (providing favourable tax condition to Internet companies) are a proof.
- Climate Change
Although climate change does not know regional boundaries, its impact can be very different. A rise in the ocean level is devastating for the Maldives Island and has no impact for Countries like Switzerland having no shores! A rise in temperature may increase desertification in some parts of Africa and Asia but at the same time can make areas in Siberia more pleasant to live and increase agricultural yield.
Clearly, global coordination is essential but countermeasures have to be taken locally (with support of the international community).
- Aviation Travel and Tourism
Aviation travel is already subject to well regulated international agreement. The pandemic has brought forward the need for further agreement and we are seeing that so far there is a little common approach and quite a diversity in implementation (just think about the rules for reimbursing passengers for cancelled flights). These implementation are usually backed by regional regulations.
Tourism is a source of wealth for local economies as well as a potential threat to environment sustainability. Regional regulations are enforced. In the planning of the New world a balance between local needs and global needs needs to be achieved.